SEATTLE -- Boeing Co. said Monday that Scott Carson will step down as head of the company's commercial airplane division and retire at the end of the year.

Read statement from Scott Carson

The Chicago-based company said Carson will be succeeded on Tuesday by the head of its defense business, Jim Albaugh.

Read statement From Jim Albaugh

Boeing's commercial aircraft operation has struggled with sharply lower orders amid the global economic downturn, which has hurt demand for air travel and cargo services. It also has grappled with problems arising from its new 787, a next-generation aircraft that's been delayed five times. Boeing said last week the lightweight plane will fly for the first time by year's end.

Despite the 787's troubles, the plane remains Boeing's best-selling new aircraft to date and a priority for the company.

Carson, 63, has led Boeing's commercial plane division since 2006 and previously spent two years leading the unit's sales organization. He has worked for the aerospace company for 38 years.

Boeing said Dennis Muilenburg, president of its military support and services business, will succeed Albaugh as president and CEO of the company's defense business, Integrated Defense Systems.

Boeing CEO Jim McNerney said Carson and Albaugh will work together to ensure a smooth transition, and that Carson will assist on special projects for the company through the end of the year.